Construction Contracts
the employer’s behalf, apply for statutory approval from the local authority, including town planning and building plan approvals. Or, for example, in a design-and-build option, the contractors’ consultants may complete tender documentation as part of the procurement process. The employer and the contractor also need to ensure that they understand their respective contractual obligations. Assuming the technical performance criteria are dealt with, the financial and other administrative criteria must then be identified and managed. For example, what currency is applicable? How are rates of exchange and export or import of capital dealt with, and what local consumption or other statutory taxes apply? What about profits? Are they to be repatriated to South Africa? And what are the tax implications? Then there’s the insurance aspect and how this will be dealt with. “If based in South Africa, the insurer may require a higher premium, depending on the assessment of the local risk. For example, no local
equivalent of the South African ‘Strike-RiotCivil Commotion’ insurance may be available in some African countries, which will significantly change the employer’s risk profile – and insurance premiums,” says Putlitz. “It is important that all design documentation and statutor y compliance cer tificates are filed safely so that they can be retrieved easily and correctly, and shared with members of the project team. During the construction process, all members of the project team must comply with the administrative requirements of the SFC – this includes all notices, minutes of site meetings, contract instructions, etc., as well as compliance certificates, as various trades are commissioned before such service or equipment can be used. The employer must apply for an occupation certificate from the local authority before the completed building may be occupied. Occupation without such a certificate is illegal and any damage will not be covered by insurance,” Putlitz concludes.
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